What will flip the US Dollar's trajectory as inflation cools toward the Fed's 2% target in 2027?

ING expects strong US growth and sticky inflation to keep the Federal Reserve signaling possible further tightening through the first quarter of 2027, supporting the dollar in the near term. It forecasts inflation moving toward the Fed’s 2% target in the second quarter, which could lower short-term US interest rates and weaken the dollar; other strategists are also assessing whether current softness is temporary or a longer-term shift.